Today Looks Much Better Than Monday’s Mess!
We’re seeing a strong rebound today after the stock market took a brutal plunge on Monday. The initial sell-off was triggered, in part, by a rise in U.S. unemployment data, which fueled concerns about a potential economic slowdown and extreme valuations in the technology sector.
On Tuesday, the market saw a recovery as dip buyers emerged, and positive remarks from the Federal Reserve regarding interest rates helped boost investor sentiment and confidence.
Strong corporate earnings reports from several large U.S. companies, including Kenvue and Uber, provided additional support to the market. These better-than-expected profit reports helped bolster investor confidence in the resilience of corporate America.
Major indices such as the S&P 500 and Nasdaq 100 saw gains in futures trading, with the S&P 500 futures rising by 1.3% and Nasdaq 100 futures by 1.8%. Additionally, Japanese equities experienced a significant rebound, which also contributed to the positive momentum in global markets. The Dow Jones Index was up more than 500 points as of mid afternoon.
We Are Not Out Of The Woods Yet
Following a market rebound, there are still potential risks that investors and market participants should be aware of. The rebound may be short-lived and could potentially be a "dead cat bounce" rather than a genuine trend reversal. A “dead cat bounce” is a temporary recovery in asset prices after a significant decline, followed by a continuation of the downward trend. This false rally can mislead investors into thinking the market has bottomed out when in fact it may continue to decline further.
There's a risk that the underlying economic concerns that initially caused the market decline have not been fully addressed. For instance, the recent rebound occurred despite ongoing worries about a potential economic slowdown and extreme valuations in the technology sector. If these fundamental issues persist, they could lead to renewed market volatility or another selloff in the near future.
Additionally, there's a possibility that short-term technical factors, such as short-covering or technical traders believing the market has reached a bottom, may have contributed to the rebound.
These effects tend to be temporary and may not reflect a sustainable recovery in market conditions. Lastly, external factors such as changes in monetary policy, geopolitical events or unexpected economic data could quickly reverse the positive sentiment that drove the rebound.
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The Job Market
In light of the stock market plunge and subsequent comeback, these fluctuations can lead to broader economic downturns and significant disruptions in employment trends. The labor market has already shown signs of slowing, with a decrease in job openings and overall hiring activity.
This historical pattern underscores the interconnectedness of financial markets, business confidence and employment levels. Stock market crashes erode consumer and business confidence, leading to reduced spending and investment. This decline in economic activity can trigger a recession, as witnessed in the Wall Street Crash of 1929, preceding the Great Depression, and the 2008 financial crisis.
During periods of market turmoil, companies frequently become concerned about their financial stability and future economic conditions. As a result, they may implement cost-cutting measures, including layoffs, to preserve cash and maintain profitability.
The Great Recession led to widespread job losses across various sectors, as businesses responded to the sharp economic downturn. The pattern of downsizing amid economic headwinds is a common response to declining revenues and the need to streamline operations. The impact on the job market can be severe, with rising unemployment rates and increased competition for available jobs.
Workers may face prolonged periods of joblessness, and recent graduates or entry-level professionals may find it particularly challenging to secure employment.
Hopefully, this won’t be the case.
However, LinkedIn’s data shows a deceleration in hiring for white-collar professionals. Some workers are currently taking on multiple full-time jobs, suggesting there is a lack of full-time employment opportunities. There has been a marked slowdown in hiring for many white-collar jobs as businesses prepare for a potential recession.
Meet The New VP Candidate: Tim Walz
Tim Walz is the current governor of Minnesota, having been elected to that position in 2018. Prior to becoming governor, he served as a U.S. Representative for Minnesota's 1st congressional district from 2007 to 2019.
Some of his accomplishments as governor include signing legislation to provide free breakfast and lunch to all K-12 students in Minnesota public schools, legalizing recreational marijuana and implementing clean energy initiatives.
During the COVID-19 pandemic, Walz implemented a range of measures to protect public health, including stay-at-home orders, mask mandates and efforts to increase testing and vaccination rates. His administration's response to the pandemic aimed to balance public health concerns with the economic impact on businesses and workers.
Additionally, Walz has been involved in criminal justice reform and addressing racial inequalities. Following the death of George Floyd and the subsequent protests, his administration has worked on police reform measures and initiatives to address systemic racism.
His policies reflect a commitment to progressive values and improving the quality of life for all Minnesotans.
However, Walz has also faced criticism during his gubernatorial tenure, including the size and scope of his budget increases. Critics argued that the significant growth in state spending would lead to higher taxes for Minnesotans. His opponents argued that Walz’ substantial investments in education, healthcare and infrastructure were excessive and would strain the state's finances.
Another point of contention in Minnesota was Walz's proposed tax increases. His budget plan included raising taxes on the wealthiest residents and corporations to fund various state programs. Critics argued that these tax hikes would discourage business investment and drive high-income individuals out of the state. They contend that such measures would ultimately reduce the state's competitiveness and economic growth.
His plans to increase funding for social services and public health initiatives have been met with resistance from those who believe that the state should prioritize fiscal conservatism and reduce government intervention in these areas.
Despite these criticisms, Walz’s supporters believed his solutions would address long-standing issues in Minnesota, such as educational disparities, healthcare access and infrastructure needs, leading to long-term benefits for the state and an improved quality of life for its residents.
Liz Young, Head of Investment Strategy At SoFi: How to Build a Career In Finance
Liz's investment strategies and insights are sought the world over from CNBC, where she is a regular contributor on TV, to SoFi, where she leads the financial technology company's strategy function. We get the tactical low-down into how someone can break into a career on Wall Street, the experience needed to become an investment strategist, and how she became a go-to woman in the finance industry.
Notably, Liz reveals how to achieve professional success, especially if you have to create your own opportunities. We dig into how to diversify your resume and avoid getting pigeonholed into a specialty, especially earlier on in your career, and how to find your unique "it" factor and stand out.
Thriving In Chaos: How To Be Super Successful, Wealthy And Happy In A F*cked-Up World
We all have something in common: there’s an innate human desire to succeed in life—socially and at work. We want to be loved, forge lasting, fulfilling relationships, enjoy career and financial success and lead wonderful, productive lives.
This seems reasonably simple enough. However, it’s getting exceedingly difficult to stand out in a crowded workplace to get noticed and appreciated for your hard work and efforts, especially in a doom-and-gloom, tough economic environment with high inflation and costs continually rising.
Success in life and work is about developing a holistic approach that nurtures various aspects of personal and professional growth. Despite the odds, you must cultivate a combination of factors that include possessing a positive mindset and attitude, grit, a strong work ethic, a sense of purpose and fostering constructive habits to reach your goals and ambitions.
The goal of this book is to offer the tools, advice and guidance to succeed in your life and work.